What is a CPO vehicle?
Certified pre-owned vehicles are used cars, typically newer vehicles, that have to meet rigorous testing and requirements to be certified by the manufacturer. They are typically more desirable because they can be safer than standard, uncertified used cars. However, higher standards come with a steeper price. The price increases can vary by vehicle, so keep that in mind when considering your next purchase.
Typically, CPOs have less than 80,000 miles and are no more than five to six years old, many of them coming off being a lease car. However, the mileage and age standards are determined by the automaker and can range from 60,000 miles all the way up to 100,000 miles.
The vehicles go through mandatory inspections conducted by manufacturer-certified mechanics. They are then reconditioned and available for sale with manufacturer-backed warranties. Along with extended warranties, some include special perks like roadside assistance, free maintenance, and special financing offers.
Certified pre-owned vehicles are important in the used car market because they come with a unique quality and safety assurance you can’t guarantee with other used cars. CPOs provide car buyers with the peace of mind that comes with a new vehicle because of the rigorous inspections, just without the full cost. Standard used cars aren’t required to go through any testing and don't have any warranties, which can leave some car-buyers hesitant. That isn’t the case with CPOs.
What Makes a Car Certified?
For a car to be certified, it needs to fit certain age and mileage criteria, which vary by brand. If the car fits under the manufacturer’s requirements, they are then carefully inspected by a manufacturer-backed mechanic. These inspections typically cover over 100 checkpoints. If the vehicle isn’t up to par, it will be fixed up as necessary to meet manufacturer standards. Once a vehicle is refurbished, it will be certified and ready to purchase.
To give you an idea of how a CPO may be more valuable than a standard used car, here are a few program examples and what they include:
- Audi – Audi CPO vehicles are put through a rigorous 182-point inspection. CPOs must be six model years old or newer and have less than 80,000 miles on them. All-new Audis come with a five-year/unlimited mileage warranty, and you get whatever portion of that remains when you purchase the CPO. After the new-car warranty runs out, or at the start of your purchase if it's already expired, you get a 12-month warranty with no mileage cap. Audi also includes 24-hour roadside assistance, emergency towing, and Audi Assist for CPO buyers. There is no deductible for service when you're covered under this warranty.
- Ford – With Ford's Blue Advantage program, CPOs undergo a 172-point inspection and must be no more than 6 model years old with less than 80,000 miles on them. CPOs are covered under a 7-year/100,000-mile limited powertrain warranty from the original date of sale. There is also a 12-month, 12,000-mile comprehensive limited warranty, 24/7 roadside assistance, and 22,000 FordPass reward points to put toward your first two scheduled maintenance visits. Service deductibles are $100 for covered expenses.
- General Motors – All Chevy, Buick, and GMC models undergo a 172-point inspection before becoming a CPO. Vehicles must be 6 model years old or newer, have less than 75,000 miles, and have no open recalls. These cars all receive a 6-year/100,000-mile powertrain warranty from the original sale date, and come with an additional 12-month/12,000-mile bumper-to-bumper warranty from the date you purchase, or after the original warranty runs out. 24/7 roadside assistance is included until the powertrain warranty runs out. CPOs also include a three-month trial of SiriusXM and one month of OnStar.
Why Choose CPO Used Cars?
In addition to the added peace of mind that comes with certified vehicles, CPOs are considered a hot commodity because they come with additional benefits that standard used cars don't have, like a limited warranty. Here's a look at some perks of choosing a CPO.
Warranty coverage
One of the biggest perks of a certified pre-owned car is the manufacturer's guaranteed warranty. Since CPOs are used vehicles, manufacturers provide warranty coverage to resolve any potential lasting issues once a car is sold. Some warranties cover powertrain issues, provide coverage for electrical systems, air conditioning, infotainment systems, brakes, and more. The coverage varies by manufacturer, and most is valid for more than a year. However, some warranties come with stipulations such as specific service locations and limited wear-and-tear coverage. Warranties are often transferable in case you decide to sell your car.
Thorough inspection process
CPOs are put through rigorous inspection processes that help ensure the safety of a vehicle for purchase. Not only are the tests thorough, but they are conducted by a manufacturer-appointed mechanic to guarantee professionalism and standardized processes. Some inspection checkpoints include verifying the engine performance, transmission operations, suspension and steering systems, airbag and safety systems, corrosion monitoring, turn signals and warning systems, window and windshield testing, technology maintenance, and more. They often include road tests to ensure the vehicle is driving properly, as well as checking the documentation to verify the vehicle history and title status, among other things. These inspections aren’t required for all used cars, making CPOs potentially safer than regular used cars.
Lower depreciation costs
Certified pre-owned vehicles are also a good option for car buyers because they have lower depreciation rates compared to newer vehicles. Cars start losing value the second they are driven off the lot. Since CPOs are usually no more than 5-6 years old, the biggest depreciation drops have already occurred, and they may retain value for longer compared to a new vehicle.
The biggest loss of value occurs in the first year of ownership, so the value of a CPO will stay relatively the same and decline at a much slower rate. These vehicles typically have a better resale value than a regular used car if they are well-maintained. The certification process in itself also adds to the value of a car, making it better to buy, resell, or trade in at a later date.
Pros vs. Cons of Buying a CPO Vehicle
When purchasing a used car of any kind, even a CPO, it’s important to understand the pros and cons to determine if the vehicle is right for you, your needs, and your priorities.
Pros:
Better Vehicles to start. Certified used cars are typically newer vehicles that are only a few years old. So, you are benefiting from modern features, updated technology, modern safety features, and newer stylings without paying full price. They are a good middle ground between new and used cars.
Manufacturer-backed warranties. CPOs are unique because they include manufacturer-backed warranties, unlike regular used cars. If you come across issues that are included in the coverage, you’ll be able to get them repaired without breaking the bank. This provides peace of mind.
Multi-point Inspections and reconditioning. Certified pre-owned vehicles have to undergo thorough inspections to be certified. If there are issues with the vehicle found during the evaluations, they are already fixed before you purchase it. This makes CPOs a potentially safer option to begin with. These initial inspections and reconditionings can make it easier to maintain a car down the road.
Additional perks. These can include limited-time roadside assistance, free maintenance visits, trial subscriptions, and financing incentives. Special interest rates and financing deals vary by manufacturer and buyer qualifications, so check with your local dealer to see if you are eligible.
Higher resale value. CPOs have a higher resale value than regular used cars because they tend to be newer, have certification that guarantees the safety and condition of the vehicle, and have lower depreciation rates.
Cons:
Higher price upfront. If you prioritize your budget when shopping for a vehicle, it is important to know that CPOs are more expensive than a standard used car. They typically are $800-$3,000 more than an uncertified vehicle and can come with extra fees for certifications and inspections, so keep that in mind.
Vary by manufacturer. Although CPOs are standardized in the fact they they must be inspected, refurbished, and certified, these standards can vary by manufacturer. Each automaker has different standards when it comes to the age and mileage of the vehicle. Inspections and warranties also differ by manufacturer, so make sure to shop around for the right vehicle.
How to Buy a Certified Pre-Owned Car?
Buying a CPO isn't that much different than buying a standard used car. Here's how to make the purchase:
- Decide if it's Right for You – Use the pros and cons above to help inform your decision. Weigh your non-negotiables and your absolutely-nots and see if a CPO is worth it for you. Keep in mind the additional costs, like taxes, title, and license fees, when making your decision.
- Choose the Vehicle You Want –Narrow down your options by deciding your preferred make and model, keeping in mind fuel efficiency, aesthetics, cargo space, and functionality. Be mindful that not all used vehicles are CPOs. Start by shopping brands that typically certify used cars, like Audi, Ford, Chevrolet, and Subaru.
- Find an Authorized Dealership – Only franchised dealerships sell CPO vehicles. Although this limits availability, it helps ensure standards are being properly met and maintained.
- Review Warranty Coverage – Warranty coverage is determined by the manufacturer and can differ by brand and model. Before making the purchase final, make sure to find out what's included in the coverage, how long coverage lasts, and if it's transferable. It's better to ask all the questions before you buy.
- Explore Financing Options – CPOs can sometimes qualify for special financing terms or incentives if you qualify. See if these options are available to you. If you aren't able to utilize these financing deals as a result of bad credit, consider finding a bad credit car loan.
- Bring Proper Documentation – Once all the steps are complete and you're ready to finally purchase, make sure to bring all the correct paperwork. CPOs are a hot commodity, and you don't want to miss out on your dream car because you forgot a form at home.
- Drive Off – Once all the paperwork and financing are settled, the car is yours to drive. You will continue to repay your loan in installments, and once it's paid, the car is yours.
What's the Difference Between Certified Pre-Owned and Used Cars?
The main difference between certified pre-owned and standard used cars is that used cars are sold as-is and aren’t refurbished, certified, or guaranteed.
Regular used cars don’t have to meet any requirement before they are sold, unlike a CPO. They can be sold without any inspections, possibly with damage, and usually have no protections. A used car can open the buyer up to safety concerns, vehicle issues, and potentially costly repairs.
Important factors to consider when comparing certified versus non-certified vehicles include: age, mileage, warranty coverage, damages, potential repair costs, and vehicle history.
Conclusion: Is a CPO Right for You?
When buying any vehicle, it is important to evaluate what is important to you and what your needs are. If you are looking for a vehicle on the newer side with extra protection, but don’t want to purchase an expensive new vehicle, a CPO could be a good option. The added inspections and refurbishment provide peace of mind, as well.
CPO vehicles, although they tend to be on the pricier side, can be more worth it in the long run. Since it’s already been repaired and deemed safe, it can save you money on future repairs. The better condition of the vehicle also gives it a better resale value.
FAQs
Why are CPO cars more expensive?
They come with inspections, warranties, and reconditionings that aren’t required for regular used cars.
What exactly does the CPO warranty cover—and for how long?
Warranty coverage differs by manufacturer, but most include powertrain and bumper-to-bumper coverage for a set number of years and/or miles.
Can you negotiate CPO car prices?
Yes, some CPOs are available with negotiations on price points. Some are available with special financing options.
Are CPO programs governed by state law or just manufacturer rules?
Certified pre-owned standards aren’t state-regulated and are set by manufacturers. Standards and practices vary by manufacturers as well.
How many miles is good for a pre-owned car?
Typically, CPOs are under 80,000 miles, and can range from 60,000 miles to 100,000 miles. Under 60,000 miles is ideal, but due to the additional maintenance and repairs, these cars are typically still reliable vehicles even with higher mileage.
